Jack and Jill

Jack and Jill went up the hill to fetch a bucket of ?money. Money? They are continuing to fill their bucket with stocks without any consideration to the value of these equities. They are not worried at all as they are buying "safe" mutual funds.

Everyone knows mutual funds are safe. Jack and Jill know they don't know how to pick good stocks so they leave that to the fund manager. He is an expert.

When you look at the long term record of 99% of the mutual funds you will see that expertise has been sadly lacking. I hate to remind you of the 2000 to 2003 period, but I must. In fact I must tell you it is going to happen again. Now you want to know when?.and so do I.

And that is the problem with almost every fund manager. As long as the market is going up they can't do much damage to your account, but when it rolls over and heads down they have no idea how to invest when a bear market is in progress. Not a single one of them will acknowledge that cash is a position.

Cash is a position? They are in shock. Of course they are. If brokerage customers put their money in a money market account while the market is falling it means they do not make any commission at all and if they recommend this to their customers the brokerage manager will fire them because he won't make any money either. "Keep your customers fully invested or I'll show you the door" is the manager's comment.

You must learn when to sell. Any fool can buy, but it is the wise man who knows when to sell. To see the condition of the overall market one of the best indicators is the SP500 Index. Your broker compares everything he does with the SP500 because it is a broad base of 500 stocks that are widely traded.

The finest indicator is the SP500 Index. Draw a 40-week chart of the closing prices. If you don't know how ask your broker. He will tell you. Write it down and save it. It is very simple. Have him set up a 40-week Simple Moving Average to appear on that chart. Look at 5 years worth of prices. Immediately you will see that if you are in the market while the 40-week MA is going up you are making money and if you are out of all your positions while the index average is going down you will not lose money. It doesn't get any easier that that.

Jack and Jill can fill their pail as the market is going up and need not spill their accumulation while they walk confidently down the hill holding their bucket full of cash not equities.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:


pen paper and inkwell


cat break through


When?

When will the stock market stop going down and start... Read More

Why Is The Macedonian Stock Exchange Unsuccessful?

The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More

Basics of Stock Market

Financial markets provide their participants with the most favorable conditions... Read More

Stock and Fund Dividends

When is a dividend not a dividend?The latest thing "conservative"... Read More

12 Basic Stock Investing Rules Every Successful Investor Should Follow

There are many important things you need to know to... Read More

Selection Vs Direction

As I have said many times before in this column... Read More

Stock Market Volatility

In my opinion, due to the volatility of stock market... Read More

How to Short Stocks? How to Make Money when Your Stocks Go Down by Shorting

The stock market can present you with a lot of... Read More

Some Good News for A Change

Before we get into all the good news out there,... Read More

Shadow Bull

As one of my regular readers you know I have... Read More

Stock Market Insanity

Let's first define insanity. It is doing the same thing... Read More

How To Make, And Keep, Money Trading Stocks

If you are serious about making and keeping money by... Read More

Tips to Finding Other People?s Simple Trading Plans

Did you know you can make money (and a lot... Read More

Stock Insurance

You have a lock on your house. You have a... Read More

Series 7 Exam

What is the Series 7 Exam? If you... Read More

Bad News is Good News

For weeks, no, months we have been bombarded with nothing... Read More

Market Success

Who are the successful investors?There are those who follow the... Read More

Investment Attorneys and Garbage Stocks

How is it possible that trash Companies are posting less... Read More

Discover the Biggest Trading & Investing Online Mistake

Any online investor / trader seeks an excellent off or... Read More

Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market

This is an extract of an article which was first... Read More

Price to Earnings Ratio - P/E

After finding the price of a particular stock, usually the... Read More

Why Change Funds?

On November 17 I bought 7 different mutual funds and... Read More

Understanding the Bulls and the Bears

If you've ever flipped on the television to CNN Financial... Read More

Stuff

I continually hear from economists, talking heads, other market letter... Read More

Understanding Stock Market Indexes

A stock market index is a statistical measure of changes... Read More

Discipline

One of the great "secrets" of successful people is discipline... Read More

Advisory News Letters

Several times each month I am solicited by various market... Read More

Trading Education: The Best of Both Worlds!

I made my very first investment in the stock market... Read More

Trading Tips No 8: Picking the Best Stock Market Price

Carefully thinking through your goal as a trader is of... Read More

Economists #2

Economists know more about how the fragments of society work... Read More

Buy and Hold Investment Philosophy

Wall Street has been preaching the doctrine of Buy and... Read More

Bollinger Bands Strategies

The Bollinger Band theory is designed to depict the volatility... Read More

Oil Stocks As A Long Term Investment

The demand for world oil is increasing while world reserves... Read More